Is a cash-based model right for you?

Posted By American Med Spa Association, Wednesday, May 11, 2016

cash-based modelContracting with third party payers and dealing with government regulations isn’t getting easier. It may seem like every time your practice adjusts to new demands, another change is handed down. These changes deliver a hit to your practice in administrative costs and often with little to no financial reward.
Physicians often express a feeling of loss of control over their businesses even though they bear all the responsibility of a physician-owned practice. Many dermatologists have found a solution in adopting new, alternative practice models.
One such model is commonly known as direct pay, which is a term sometimes used for a retainer-based payment model, most often when referring to direct primary care (DPC). Otherwise known as cash-based practices.
This is neither a concierge (annual fee) nor retainer-based (typically a monthly fee) care model, but a model in which a practice simply declines to contract with insurance and is paid directly by patients (except Medicare, typically).
Not many specialties, if any, are better positioned for this kind of model than dermatology.
The direct-pay model
In a direct-pay model, patients pay for their services directly and then seek reimbursement from their insurance for covered services. Typically the practice continues to assist patients with insurance by submitting claims for patients who are seeking reimbursement or credit toward their high deductible plans, however they are relieved of the burdensome chase for practice reimbursement by third-party payers.
This arrangement can save your practice thousands of dollars in administrative and insurance billing costs and dramatically improve your revenue cycle. Even though your practice likely has a good handle on patient collections for elective services, keep in mind that when adopting such a drastic policy change, clear and upfront communication with patients regarding payment or payment plans is extremely important to ensure prompt payment and positive patient relations.
Transitioning away from an insurance-based practice takes thoughtful planning to safeguard practice health and success in both the immediate and distant future.
Read more at Dermatology Times.
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